Fla. Business Associations Ask Lawmakers to Fix Medical Liability System

February 19, 2003

Florida’s top business associations have demanded that state legislators fix the broken medical liability system, saying it is one of the key reasons healthcare costs are skyrocketing for employers and workers.

The five associations – representing thousands of Florida businesses and millions of employees – said they support Governor Jeb Bush’s efforts to end the medical liability crisis and want lawmakers to enact the recommendations of the governor’s task force.

Ben Haskew, vice president of Chamber Development for the Florida Chamber of Commerce, noted that a statewide survey of 4,000 employers released two weeks ago found many Floridians face skyrocketing health insurance costs, shrinking availability, restricted access and loss of coverage.

The chamber survey found that the number of Florida employers who offer health insurance to employees had declined from 91 percent in 1999 to 76 percent currently, and that 86 percent of employers had experienced an increase in premiums in the past 12 months–nearly half saw premium increases of greater than 20 percent.

“The medical liability insurance crisis – fueled by excessive litigation -is one of the key reasons healthcare costs are going up for employers and, in turn, more and more employers are struggling to provide health insurance to their workers,” Haskew said. “Fixing the broken medical liability system is one big step state lawmakers must take to make health insurance more affordable and accessible.”

Besides the Florida Chamber of Commerce, other business associations that took part in the press conference today in front of the Florida House chambers included the Florida Retail Federation, Associated Industries of Florida, the National Federation of Independent Businesses, and the Florida United Businesses Association.

The five business associations are part of the Coalition to Heal Healthcare in Florida, the broad-based alliance of more than 100 of the state’s top medical and business groups. The coalition, which is spearheaded by the Florida Hospital Association and the Florida Medical Association, is urging state lawmakers to fix the broken medical liability system during the 2003 annual legislative session.

“For months now, we’ve been telling lawmakers that this crisis is already hurting Floridians in two ways, by increasing healthcare costs for everyone and by threatening citizens’ ability to obtain specialized care such as obstetrics, mammography and emergency room services,” Wayne NeSmith, president of the Florida Hospital Association, said.

“Doctors, hospitals and patients are experiencing this crisis firsthand every day through the erosion of healthcare services,” NeSmith added. “But Florida’s business community is dealing with this crisis every day too – by having to grapple with increasingly costly health insurance coverage for workers.”

In a July 2002 report, the U.S. Department of Health and Human Services found that the costs of runaway medical liability litigation are being paid by all Americans through higher premiums for health insurance, higher out-of-pocket payments when receiving care and higher taxes.

By limiting unreasonable awards for non-economic damages in medical liability cases, U.S. healthcare costs reportedly could be reduced by 5 to 9 percent, saving $60 billion to $108 billion annually, HHS found.

Additionally, a study issued Feb. 11 by Tillinghast-Towers Perrin found that the U.S. tort system cost $205 billion in 2001, or $721 per U.S. citizen, an increase of 14.3 percent in tort costs since 2000. The study also found that nationally, medical liability costs had risen an average of 11.6 percent annually since 1975, in contrast to an average annual increase of 9.4 percent for overall tort costs.

The coalition supports a comprehensive legislative fix that enhances patient safety, stabilizes the insurance market and creates more reasonable parameters for compensating injured patients. While the coalition supports fairly compensating injured patients for economic damages such as medical costs, lost wages and lost earning potential, it also supports a key recommendation of the governor’s task force–to cap non-economic damages at $250,000.

“The medical community and the business community are speaking in one voice – we need a legislative fix now. Lawmakers cannot simply wait another year and allow this crisis to worsen,” NeSmith added. “We can achieve fair reform that compensates injured patients while protecting healthcare for all Floridians.”

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